Net cash provided from operating activities of $615.0 million,
excluding a tender premium of $15.6 million and after purchases of
property, plant and equipment of $95.2 million, resulted in record
$535 million of adjusted free cash flow in fiscal 2016 compared to
$454 million in fiscal 2015 and $359 million in fiscal 2014

Planning 8th consecutive year of record
performance in fiscal 2017, including adjusted free cash flow of
approximately $575-$590 million

The Company also said it plans to deliver an eighth consecutive year of
record performance in fiscal 2017, including expected growth in reported
net sales above category rates and adjusted free cash flow of up to 10
percent.

Fiscal 2016 Highlights:

Net sales of $5.04 billion in fiscal 2016 increased 7.4 percent
compared to $4.69 billion last year. Excluding the negative impact of
$126.2 million of foreign exchange and acquisition sales of $351.8
million, organic net sales, a non-GAAP measure, increased 2.6 percent
from the prior year. See Other Supplemental Information for
reconciliation to GAAP net sales.

Net income of $357.1 million and diluted EPS of $5.99 in fiscal
2016 increased compared to net income of $148.9 million and diluted
EPS of $2.66 in fiscal 2015 primarily due to the impact of the GAC
acquisition, volume, improved mix, reduced acquisition and
restructuring activity, a lower effective tax rate, and one-time debt
financing and refinancing costs from the prior period.

Adjusted diluted EPS, a non-GAAP measure, of $5.20 in fiscal 2016
increased 20.6 percent compared to $4.31 last year predominantly due
to the impact of the GAC acquisition, volume, improved mix and lower
interest expense, partially offset by higher weighted average common
shares outstanding. See Other Supplemental Information for
reconciliation to GAAP EPS.

Adjusted EBITDA, a non-GAAP measure, of $952.8 million in fiscal
2016 increased 19.0 percent compared to $800.6 million in fiscal 2015.
Excluding the negative impact of foreign exchange of $79.8 million, as
well as the effect on EBITDA from acquisitions of $106.4 million,
organic adjusted EBITDA of $926.2 million increased 15.7 percent
versus the prior year. See Other Supplemental Information for
reconciliation to GAAP net income.

Adjusted EBITDA margin, a non-GAAP measure, of 18.9 percent in
fiscal 2016 increased from 17.1 percent in fiscal 2015, which
represented the sixth consecutive year of adjusted EBITDA margin
improvement. The increase was primarily due to the GAC acquisition,
improved mix and operating expense leverage on the base business. See
Other Supplemental Information for reconciliation to GAAP net income.

Leverage (total debt at par of $3,682 million to adjusted EBITDA of
$952.8 million) decreased to approximately 3.9 times at the end of
fiscal 2016 compared to approximately 4.4 times at the end of fiscal
2015. Including the subsequent redemption in October 2016 of the
remaining $130 million of 6.375% senior unsecured notes tendered for
in September, total leverage was approximately 3.7 times.

Adjusted free cash flow, a non-GAAP measure, was a record $535
million compared to $454 million in fiscal 2015 and $359 million in
fiscal 2014. See Other Supplemental Information for reconciliation to
GAAP Cash Flow Provided From Operating Activities.

“Fiscal 2016 was our 7th consecutive year of record financial
performance,” said Andreas Rouvé, Chief Executive Officer of Spectrum
Brands Holdings. “Our improvement was broad-based across most businesses
and geographies. Home and Garden, Hardware and Home Improvement and
Global Auto Care achieved record results. Batteries, Personal Care and
Global Pet delivered strong performances. All of our core regions
reported organic net sales and adjusted EBITDA growth on a currency
neutral basis.

“Fiscal 2016 was a year of good progress with our Spectrum First
initiative,” Mr. Rouvé said. “Spectrum First is the pathway to move our
Company to the next level of performance as a large cap stock with
growth accelerators built around customers, process and people.

“The launch of innovative products accelerated in all categories, and we
continued to leverage our global infrastructure and shared services as
well as improve our processes,” he said. “To support our organic growth,
we began to step up R&D and marketing investments while adding sales
specialists to pursue white space opportunities worldwide. At the same
time, unprofitable businesses were exited to help improve profitability,
margins and free cash flow.

“Adjusted free cash flow grew a strong 18 percent,” said Mr. Rouvé.
“Term debt reduction of more than $410 million enabled us to reduce
total leverage by one-half turn and end the fiscal year at approximately
3.9 times, consistent with our guidance.

“We delivered good profit growth and solid margin expansion in the
fourth quarter, despite lower net sales due mostly to four fewer
shipping days that impacted revenues by approximately 5 to 6 percent as
well as the exit of unprofitable business of approximately $12 million,”
he said. “The related favorable mix effect coupled with strong cost
savings helped deliver significant gross margin and adjusted EBITDA
margin expansion despite the negative foreign exchange headwinds.

“As we look to fiscal 2017, we plan for above category top-line and
bottom-line growth and a free cash flow increase of up to 10 percent
driven by the continuous launch of innovation and further leveraging of
our global platform to expand distribution of our products,” Mr. Rouvé
said. “We remain focused on our ‘more, more, more’ organic growth
strategy to push more cross-listings, serve more sales channels and
enter into more countries through leveraging our strong retailer
relationships.”

Gross profit and gross profit margin for fiscal 2016 were $1.92 billion
and 38.1 percent compared to $1.67 billion and 35.6 percent,
respectively, in fiscal 2015. The gross profit margin percentage
increase was primarily due to improved mix and the GAC acquisition,
partially offset by the negative impact of foreign exchange.

Operating expenses of $1.26 billion in fiscal 2016 compared to $1.20
billion in the prior year. Higher SG&A expense, driven primarily by the
full-year effect of the GAC acquisition, was partially offset by lower
acquisition, integration and restructuring costs.

The Company reported GAAP net income of $357.1 million, or $5.99 diluted
income per share, in fiscal 2016 on average diluted shares and common
stock equivalents outstanding of 59.6 million. In fiscal 2015, the
Company reported GAAP net income of $148.9 million, or $2.66 diluted
income per share, on average diluted shares and common stock equivalents
outstanding of 55.9 million. The Company generated adjusted diluted
earnings per share, a non-GAAP measure, of $5.20 in fiscal 2016, a 20.6
percent increase compared to $4.31 in fiscal 2015. The improvement was
predominantly due to the impact of the GAC acquisition, volume and
favorable mix, partially offset by the negative impact of foreign
exchange.

Adjusted EBITDA, a non-GAAP measure, of $952.8 in fiscal 2016 increased
19.0 percent compared to $800.6 million in fiscal 2015. HHI and Home and
Garden delivered record adjusted EBITDA while all businesses grew
year-over-year. Excluding the negative impact of $79.8 million of
foreign exchange, as well as acquisition-related EBITDA of $106.4
million, organic adjusted EBITDA of $926.2 increased 15.7 percent versus
fiscal 2015. See Other Supplemental Information for reconciliation to
GAAP net income. Reported adjusted EBITDA margin expanded to 18.9
percent compared to 17.1 percent last year, which represented the sixth
consecutive year of adjusted EBITDA margin growth. The improvement was
primarily due to improved mix, the impact of the GAC acquisition and
operating expense leverage.

Gross profit and gross profit margin in the fourth quarter of fiscal
2016 were $485.8 million and 38.9 percent, respectively, compared to
$467.4 million and 35.7 percent, respectively, last year. The gross
profit margin percentage increase was primarily due to favorable mix and
strong productivity, partially offset by the negative impact of foreign
exchange.

Operating expenses of $327.3 million in the fourth quarter of fiscal
2016 decreased 1.7 percent compared to $333.0 million in the prior year
primarily due to lower acquisition, integration and restructuring
charges.

The Company reported net income of $89.0 million, or $1.49 diluted EPS,
in the fourth quarter of fiscal 2016 on average diluted shares and
common stock equivalents outstanding of 59.8 million. In the fourth
quarter of fiscal 2015, net income was $26.5 million, or $0.44 diluted
EPS, on average diluted shares and common stock equivalents outstanding
of 59.8 million. The Company generated adjusted diluted EPS of $1.31 in
the fourth quarter of fiscal 2016, an increase of 15.9 percent compared
to $1.13 in fiscal 2015 primarily due to strong productivity and
favorable mix.

Adjusted EBITDA of $236.9 million in the fourth quarter of fiscal 2016
increased 3.3 percent compared to $229.3 million in fiscal 2015.
Excluding the negative impact of $14.4 million of foreign exchange,
organic adjusted EBITDA of $251.3 increased 9.6 percent versus the
fourth quarter of 2015. Reported adjusted EBITDA margin of 19.0 percent
increased from 17.5 percent last year. See Other Supplemental
Information for reconciliation to GAAP net income.

Fiscal 2016 Fourth Quarter Segment Level Data

Global Batteries & Appliances (GBA)

Three Month Period Ended

Twelve Months Ended

(in millions, except %)

September 30, 2016

September 30, 2015

Variance

September 30, 2016

September 30, 2015

Variance

Net Sales

$

520.0

$

553.0

$

(33.0

)

(6.0

%)

2,010.3

$

2,092.2

$

(81.9

)

(3.9

%)

Adjusted EBITDA

83.4

77.6

5.8

7.5

%

311.4

306.9

4.5

1.5

%

Adjusted EBITDA Margin

16.0

%

14.0

%

200

bps

15.5

%

14.7

%

80

bps

The GBA segment reported fiscal 2016 fourth quarter net sales of $520.0
million versus $553.0 million in the year-ago quarter. Organic net sales
decreased 3.7 percent as consumer batteries, personal care and small
appliances reported lower revenues which were, in large part, negatively
impacted by four fewer shipping days totaling approximately $27 to $31
million of sales for the GBA segment.

Global battery net sales of $222.7 million in the fourth quarter of
fiscal 2016 decreased 2.9 percent compared to $229.3 million in the
fourth quarter of fiscal 2015. Excluding negative foreign exchange
impacts of $1.8 million, fiscal 2016 fourth quarter organic net sales
fell 2.1 percent, including the unfavorable impact of four fewer
shipping days of approximately $12 to $13 million of sales. Solid growth
on a currency neutral basis in Europe, driven by increased specialty
battery revenues, and in Latin America primarily from gains in specialty
batteries and lights was more than offset predominantly by lower results
in North America and fewer shipping days. Lower North American sales
were due to holiday shipment timing and strong new customer orders for
hearing aid batteries in the prior year.

Net sales for the global personal care product category of $120.6
million in the fourth quarter of fiscal 2016 compared to $125.8 million
last year. Excluding negative foreign exchange impacts of $3.0 million,
organic net sales declined 1.7 percent, including the unfavorable impact
of four fewer shipping days of approximately $6 to $8 million. Growth in
constant currency in Europe, primarily in hair care appliances, and a
double-digit increase in constant currency in Latin America from hair
care and men’s shaving and grooming were more than offset by lower North
American revenues and fewer shipping days. The North American decline
was primarily due to competitor discounting, category softness in
certain hair care appliance channels, and the timing of customer
shipments against strong growth last year.

Net sales of $176.7 million in the global small appliances product
category in the fourth quarter of fiscal 2016 compared to $197.9 million
in the year-ago quarter. Excluding negative foreign exchange impacts of
$7.9 million, fiscal 2016 fourth quarter organic net sales decreased 6.7
percent, including the unfavorable impact of four fewer shipping days of
approximately $9 to $10 million of sales. Compared to strong growth of
8.2 percent in the prior year, lower fiscal 2016 fourth quarter revenues
in North America, Europe and Latin America were attributable to
competitor discounting, retailer shipment timing, fewer shipping days
and soft POS largely in food preparation, beverage and cooking
categories at several key U.S. retail customers.

The HHI segment reported net sales of $328.1 million in the fourth
quarter of fiscal 2016, a 1.0% decline compared to $331.4 million in the
prior year. Excluding the negative impact of foreign exchange of $1.4
million, organic net sales decreased 0.6 percent. Strong growth in the
core North American residential security category was negatively
impacted by fewer shipping days totaling approximately $18 to $20
million of sales. The planned exit of unprofitable businesses and the
expiration of a customer tolling agreement adversely impacted sales
growth by 0.9 percent.

The Global Pet Supplies segment reported net sales of $206.7 million in
the fourth quarter of fiscal 2016 compared to $219.3 million last year.
Excluding the unfavorable impact of foreign exchange of $2.5 million,
organic net sales declined 4.6 percent. Lower aquatics and companion
animal revenues were predominantly due to four fewer shipping days which
negatively impacted sales by approximately $11 to $12 million. Aquatics
revenues also were negatively affected by reduced U.S. commercial sales
due to fewer remodels at a major retailer compared to the prior year and
in Europe as a result of U.K. economic conditions. North American
companion animal sales were negatively affected largely by the timing of
promotions and the exit of low-margin private label rawhide business at
a major retailer. In Europe, revenues were also lower from the planned
exit of a pet food customer tolling agreement.

The Home and Garden segment reported fourth quarter net sales of $94.3
million, a 12.9 percent decrease compared to $108.3 million last year.
Lower revenues, primarily in the repellents and lawn and garden controls
categories, were attributable to four fewer shipping days which impacted
sales by approximately $6 to $8 million and lower year-over-year
replenishment orders due to earlier seasonal load-ins across retailers
in the first half of fiscal 2016.

The GAC segment reported net sales of $100.7 million in the fourth
quarter of fiscal 2016, an increase of 4.8 percent compared to $96.1
million in the prior year. Excluding the negative impact of foreign
exchange of $0.3 million, fourth quarter organic net sales of $101.0
million increased 5.1 percent, despite four fewer shipping days that
unfavorably impacted sales by approximately $8 to $9 million. Favorable
summer weather drove solid U.S. growth in refrigerants, especially A/C
PRO®.

Spectrum Brands completed fiscal 2016 on September 30, 2016 with a solid
liquidity position, including a cash balance of approximately $275
million and more than $466 million available on its $500 million Cash
Flow Revolver.

As of the end of fiscal 2016, the Company had approximately $3,682
million of debt outstanding, consisting of a series of secured Term
Loans in the aggregate amount of $1,123 million, $2,427 million of
senior unsecured notes, and approximately $132 million of capital leases
and other obligations.

As a result of solid earnings and strong working capital management, the
Company generated record adjusted free cash flow in fiscal 2016 of $535
million, surpassing its goal of $505-$515 million, fiscal 2015 adjusted
free cash flow of $454 million and fiscal 2014 free cash flow of $359
million.

Leverage (total debt to adjusted EBITDA) was approximately 3.9 times at
the end of fiscal 2016, consistent with previous guidance, and compared
to 4.4 times at the end of fiscal 2015. Including the subsequent
redemption in October 2016 of the remaining $130 million of 6.375%
senior unsecured notes tendered for in September, total leverage was
approximately 3.7 times.

Fiscal 2017 adjusted free cash flow is projected to be approximately
$575-$590 million compared to $535 million in fiscal 2016. See Other
Supplemental Information for a reconciliation to Forecasted GAAP Cash
Flow from Operating Activities. Capital expenditures, which were $95.2
million in fiscal 2016, are expected to be in the range of $110 million
to $120 million, including rollover spending from fiscal 2016. These
incremental investments will support footprint optimization, vertical
integration improvements, technology and innovation and are expected to
enhance the Company’s margin structure and organic net sales growth rate.

Conference Call/Webcast Scheduled for 9:00 A.M. Eastern Time Today

Spectrum Brands will host an earnings conference call and webcast at
9:00 a.m. Eastern Time today, November 17. To access the live conference
call, U.S. participants may call 877-556-5260 and international
participants may call 973-532-4903. The conference ID number is
95725899. A live webcast and related presentation slides will be
available by visiting the Event Calendar page in the Investor Relations
section of Spectrum Brands’ website at www.spectrumbrands.com.

A replay of the live webcast also will be accessible through the Event
Calendar page in the Investor Relations section of the Company’s
website. A telephone replay of the conference call will be available
through Thursday, December 1. To access this replay, participants may
call 855-859-2056 and use the same conference ID number.

Management believes that certain non-GAAP financial measures may be
useful in certain instances to provide additional meaningful comparisons
between current results and results in prior operating periods.
Management believes that organic net sales provide for a more complete
understanding of underlying business trends of regional and segment
performance by excluding the impact of currency exchange rate
fluctuations and the impact of acquisitions.In addition, within
this release, including the supplemental information attached hereto,
reference is made to adjusted diluted EPS, adjusted earnings before
interest, taxes, depreciation and amortization (EBITDA), and adjusted
EBITDA margin.Adjusted EBITDA is a metric used by management to
evaluate segment performance and frequently used by the financial
community which provides insight into an organization’s operating trends
and facilitates comparisons between peer companies, since interest,
taxes, depreciation and amortization can differ greatly between
organizations as a result of differing capital structures and tax
strategies. Adjusted EBITDA also can be a useful measure of a company’s
ability to service debt and is one of the measures used for determining
the Company’s debt covenant compliance.Adjusted EBITDA excludes
certain items that are unusual in nature or not comparable from period
to period. Adjusted EBITDA margin reflects adjusted EBITDA as a
percentage of net sales of the Company.Organic adjusted EBITDA
excludes the impact of currency exchange rate fluctuations and the
impact of acquisitions. The Company’s management uses adjusted diluted
EPS as one means of analyzing the Company’s current and future financial
performance and identifying trends in its financial condition and
results of operations.Management believes that adjusted diluted
EPS is a useful measure for providing further insight into our operating
performance because it eliminates the effects of certain items that are
not comparable from one period to the next.An income tax
adjustment is included in adjusted diluted EPS to exclude the impact of
the valuation allowance against deferred taxes and other tax-related
items in order to reflect a normalized ongoing effective tax rate of 35%.The Company’s management believes that free cash flow is useful to
both management and investors in their analysis of the Company’s ability
to service and repay its debt and meet its working capital requirements.Free cash flow should not be considered in isolation or as a
substitute for pretax income, net income, cash provided by (used in)
operating activities or other statement of income or cash flow statement
data prepared in accordance with GAAP or as a measure of profitability
or liquidity.In addition, the calculation of free cash flow does
not reflect cash used to service debt and therefore, does not reflect
funds available for investment or discretionary uses.The Company
provides this information to investors to assist in comparisons of past,
present and future operating results and to assist in highlighting the
results of on-going operations.While the Company’s management
believes that non-GAAP measurements are useful supplemental information,
such adjusted results are not intended to replace the Company’s GAAP
financial results and should be read in conjunction with those GAAP
results.Other Supplemental Information has been provided to
demonstrate reconciliation of non-GAAP measurements discussed above to
most relevant GAAP financial measurements.

Forward-Looking Statements

Certain matters discussed in this news release and other oral and
written statements by representatives of the Company regarding matters
such as the Company’s ability to meet its expectations for its fiscal
2017 (including expectations regarding capital expenditures and its
ability to increase its net sales, free cash flow and adjusted EBITDA)
may be forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. We have tried, whenever
possible, to identify these statements by using words like “future,”
“anticipate”, “intend,” “plan,” “estimate,” “believe,” “expect,”
“project,” “forecast,” “could,” “would,” “should,” “will,” “may,” and
similar expressions of future intent or the negative of such terms.
These statements are subject to a number of risks and uncertainties that
could cause results to differ materially from those anticipated as of
the date of this release.Actual results may differ materially as
a result of (1) the impact of our indebtedness on our business,
financial condition and results of operations; (2) the impact of
restrictions in our debt instruments on our ability to operate our
business, finance our capital needs or pursue or expand business
strategies; (3) any failure to comply with financial covenants and other
provisions and restrictions of our debt instruments; (4) the impact of
actions taken by significant stockholders; (5) the impact of expenses
resulting from the implementation of new business strategies,
divestitures or current and proposed restructuring activities; (6) our
inability to successfully integrate and operate new acquisitions at the
level of financial performance anticipated; (7) the unanticipated loss
of key members of senior management; (8) the impact of fluctuations in
commodity prices, costs or availability of raw materials or terms and
conditions available from suppliers, including suppliers’ willingness to
advance credit; (9) interest rate and exchange rate fluctuations; (10)
our ability to utilize our net operating loss carry-forwards to offset
tax liabilities from future taxable income; (11) the loss of,
significant reduction in, or dependence upon, sales to any significant
retail customer(s); (12) competitive promotional activity or spending by
competitors, or price reductions by competitors; (13) the introduction
of new product features or technological developments by competitors
and/or the development of new competitors or competitive brands; (14)
the effects of general economic conditions, including inflation,
recession or fears of a recession, depression or fears of a depression,
labor costs and stock market volatility or changes in trade, monetary or
fiscal policies in the countries where we do business; (15) changes in
consumer spending preferences and demand for our products; (16) our
ability to develop and successfully introduce new products, protect our
intellectual property and avoid infringing the intellectual property of
third parties; (17) our ability to successfully implement, achieve and
sustain manufacturing and distribution cost efficiencies and
improvements, and fully realize anticipated cost savings; (18) the cost
and effect of unanticipated legal, tax or regulatory proceedings or new
laws or regulations (including environmental, public health and consumer
protection regulations); (19) public perception regarding the safety of
products that we manufacture and sell, including the potential for
environmental liabilities, product liability claims, litigation and
other claims related to products manufactured by us and third parties;
(20) the impact of pending or threatened litigation; (21) the impact of
cybersecurity breaches or our actual or perceived failure to protect
company and personal data; (22) changes in accounting policies
applicable to our business; (23) government regulations; (24) the
seasonal nature of sales of certain of our products; (25) the effects of
climate change and unusual weather activity; and (26) the effects of
political or economic conditions, terrorist attacks, acts of war or
other unrest in international markets, including those discussed herein
and those set forth in the combined securities filing of Spectrum Brands
Holdings, Inc. and SB/RH Holdings, LLC, including their most recently
filed Annual Report on Form 10-K or Quarterly Report on Form 10-Q.

Spectrum Brands Holdings also cautions the reader that its estimates
of trends, market share, retail consumption of its products and reasons
for changes in such consumption are based solely on limited data
available to Spectrum Brands Holdings and management’s reasonable
assumptions about market conditions, and consequently may be inaccurate,
or may not reflect significant segments of the retail market.Spectrum
Brands Holdings also cautions the reader that undue reliance should not
be placed on any forward-looking statements, which speak only as of the
date of this release.Spectrum Brands Holdings undertakes no duty
or responsibility to update any of these forward-looking statements to
reflect events or circumstances after the date of this report or to
reflect actual outcomes.

SPECTRUM BRANDS HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF INCOME

Three Month Period Ended

Twelve Month Period Ended

(in millions, except per share amounts)

September 30, 2016

September 30, 2015

September 30, 2016

September 30, 2015

Net sales

$

1,249.8

$

1,308.1

$

5,039.7

$

4,690.4

Cost of goods sold

763.9

839.0

3,119.3

3,018.0

Restructuring and related charges

0.1

1.7

0.5

2.1

Gross profit

485.8

467.4

1,919.9

1,670.3

Selling

198.3

203.0

776.6

720.7

General and administrative

96.1

96.3

372.3

338.8

Research and development

15.8

14.5

58.7

51.3

Acquisition and integration related charges

5.5

14.5

36.7

58.8

Restructuring and related charges

6.9

4.7

14.7

26.6

Write-off from impairment of intangible assets

4.7

—

4.7

—

Total operating expenses

327.3

333.0

1,263.7

1,196.2

Operating income

158.5

134.4

656.2

474.1

Interest expense

74.2

65.4

250.0

271.9

Other non-operating expense, net

2.1

3.3

8.6

8.9

Income from operations before income taxes

82.2

65.7

397.6

193.3

Income tax (benefit) expense

(6.9

)

39.1

40.0

43.9

Net income

89.1

26.6

357.6

149.4

Net income attributable to non-controlling interest

0.1

0.1

0.5

0.5

Net income attributable to controlling interest

$

89.0

$

26.5

$

357.1

$

148.9

Earnings Per Share

Basic earnings per share

$

1.50

$

0.44

$

6.02

$

2.68

Diluted earnings per share

$

1.49

$

0.44

$

5.99

$

2.66

Dividends per share

$

0.38

$

0.33

$

1.47

$

1.27

Weighted Average Shares Outstanding

Basic

59.4

59.5

59.3

55.6

Diluted

59.8

59.8

59.6

55.9

SPECTRUM BRANDS HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOW

Twelve Month Period Ended

(in millions)

September 30, 2016

September 30, 2015

Cash flows from operating activities

Net income

$

357.6

$

149.4

Adjustments to reconcile net income to net cash provided by
operating activities:

Amortization of intangible assets

93.9

87.8

Depreciation

89.1

82.2

Share based compensation

64.4

47.6

Non-cash inventory adjustment from acquisitions

—

21.7

Non-cash restructuring and related charges

5.6

19.1

Write off for impairment of intangible assets

4.7

—

Amortization of debt issuance costs

11.6

12.6

Write-off of debt issuance costs on retired debt

5.8

11.2

Non-cash debt accretion

2.3

3.0

Write-off of unamortized discount on retired debt

—

1.7

Deferred tax benefit

(25.5

)

(4.6

)

Net changes in operating assets and liabilities, net of effects of
acquisitions

Receivables

48.5

93.4

Inventories

40.2

(54.5

)

Prepaid expenses and other current assets

(7.5

)

(3.1

)

Accounts payable and accrued liabilities

(40.5

)

48.7

Other

(35.2

)

(71.9

)

Net cash provided by operating activities

615.0

444.3

Cash flows from investing activities

Purchases of property, plant and equipment

(95.2

)

(89.1

)

Business acquisitions, net of cash acquired

—

(1,191.1

)

Proceeds from sales of property, plant and equipment

1.0

1.4

Other investing activities

(4.2

)

(0.9

)

Net cash used by investing activities

(98.4

)

(1,279.7

)

Cash flows from financing activities

Proceeds from issuance of debt

485.0

3,281.4

Payment of debt

(819.5

)

(2,793.1

)

Payment of debt issuance costs

(9.3

)

(38.1

)

Payment of cash dividends

(87.2

)

(70.7

)

Treasury stock purchases

(42.8

)

(21.2

)

Payment of contingent consideration

(3.2

)

—

Share based tax withholding payments, net of proceeds upon vesting

(10.8

)

(2.6

)

Net proceeds from issuance of common stock

—

562.7

Net cash (used) provided by financing activities

(487.8

)

918.4

Effect of exchange rate changes on cash and cash equivalents due to
Venezuela devaluation

—

(2.5

)

Effect of exchange rate changes on cash and cash equivalents

(1.4

)

(27.2

)

Net increase in cash and cash equivalents

27.4

53.3

Cash and cash equivalents, beginning of period

247.9

194.6

Cash and cash equivalents, end of period

$

275.3

$

247.9

SPECTRUM BRANDS HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

(in millions)

September 30, 2016

September 30, 2015

Assets

Cash and cash equivalents

$

275.3

$

247.9

Trade receivables, net

482.6

498.8

Other receivables

55.6

87.9

Inventories

740.6

780.8

Prepaid expenses and other current assets

78.8

72.1

Total current assets

1,632.9

1,687.5

Property, plant and equipment, net

542.1

507.1

Deferred charges and other

43.2

42.2

Goodwill

2,478.4

2,476.7

Intangible assets, net

2,372.5

2,480.3

Total assets

7,069.1

7,193.8

Liabilities and Shareholders' Equity

Current portion of long-term debt

164.0

33.8

Accounts payable

580.1

620.6

Accrued wages and salaries

122.9

96.5

Accrued interest

39.3

63.3

Other current liabilities

189.3

212.7

Total current liabilities

1,095.6

1,026.9

Long-term debt, net of current portion

3,456.2

3,872.1

Deferred income taxes

532.7

572.5

Other long-term liabilities

140.6

115.5

Total liabilities

5,225.1

5,587.0

Shareholders' equity

1,800.1

1,563.1

Noncontrolling interest

43.9

43.7

Total equity

1,844.0

1,606.8

Total liabilities and equity

7,069.1

7,193.8

SPECTRUM BRANDS HOLDINGS, INC.OTHER SUPPLEMENTAL
INFORMATION

ADJUSTED DILUTED EPS

Our press release contains financial information regarding adjusted EPS,
which we define as diluted EPS excluding the effect of one-time,
non-recurring activity and volatility associated with our income tax
expense. The Company believes that adjusted diluted EPS provides further
insight and comparability in operating performance as it eliminates the
effects of certain items that are not comparable from one period to the
next. Adjustments to diluted EPS include (1) acquisition and integration
costs that consist of transaction costs from non-recurring acquisition
transactions during the period or subsequent integration related project
costs directly associated with the acquired business further summarized
below; (2) restructuring and related costs, which consist of project
costs across the segments associated with restructuring initiatives
further summarized below; (3) non-recurring financing related costs; (4)
non-cash asset impairments or write-offs realized; (5) one time purchase
accounting inventory adjustments recognized in earnings subsequent to an
acquisition; and (6) other adjustments. Income tax adjustment to diluted
EPS is to exclude the impact of adjusting the valuation allowance
against deferred taxes and other tax related items in order to reflect a
normalized ongoing effective tax rate of 35%, net of adjustments made to
diluted EPS. During the twelve month period ended September 30, 2016,
other adjustments consisted of costs associated with the onboarding a
key executive and an involuntary transfer of inventory. During the three
and twelve month periods ended September 30, 2015, other adjustments
consisted of costs associated with the exiting of a key executive,
coupled with onboarding a key executive. The following is a
reconciliation of reported diluted EPS to adjusted diluted EPS for the
three and twelve month periods ended September, 2016 and 2015,
respectively:

Three Month Period Ended

Twelve Month Period Ended

September 30, 2016

September 30, 2015

September 30, 2016

September 30, 2015

Diluted earnings per share, as reported

$

1.49

$

0.44

$

5.99

$

2.66

Adjustments:

Acquisition and integration related charges

0.09

0.24

0.62

1.05

Restructuring and related charges

0.12

0.11

0.26

0.51

Debt refinancing costs

0.36

—

0.36

1.05

Write-off for impairment of intangible assets

0.08

—

0.08

—

Purchase accounting inventory adjustment

—

0.23

—

0.39

Other adjustments

—

0.05

0.02

0.18

Income tax adjustment

(0.83

)

0.06

(2.13

)

(1.53

)

(0.18

)

0.69

(0.79

)

1.65

Diluted earnings per share, as adjusted

$

1.31

$

1.13

$

5.20

$

4.31

The following summarizes the acquisition and integration related charges
incurred by the Company for the three and twelve month periods ended
September 30, 2016 and 2015:

Three Month Period Ended

Twelve Month Period Ended

(in millions)

September 30, 2016

September 30, 2015

September 30, 2016

September 30, 2015

Armored AutoGroup

$

1.3

$

4.0

$

14.6

$

21.8

HHI Business

1.3

3.7

13.3

12.0

European IAMS and Eukanuba

1.2

3.2

3.5

9.3

Salix

0.4

2.3

2.1

10.7

Other

1.3

1.3

3.2

5.0

Total acquisition and integration related charges

$

5.5

$

14.5

$

36.7

$

58.8

The following summarizes the restructuring and related charges incurred
by the Company for the three and twelve month periods ended September
30, 2016 and 2015:

Three Month Period Ended

Twelve Month Period Ended

(in millions)

September 30, 2016

September 30, 2015

September 30, 2016

September 30, 2015

HHI business rationalization initiatives

$

2.2

$

2.6

$

1.8

$

10.3

GAC business rationalization initiatives

1.7

—

5.3

—

Global expense rationalization initiatives

2.0

3.2

5.2

17.1

Other restructuring activities

1.1

0.6

2.9

1.3

Total restructuring and related charges

$

7.0

$

6.4

$

15.2

$

28.7

SPECTRUM BRANDS HOLDINGS, INC.OTHER SUPPLEMENTAL
INFORMATION

NET SALES AND ORGANIC NET SALES

The following is a summary of net sales by segment for the three and
twelve month periods ended September 30, 2016 and 2015, respectively:

Three Month Period Ended

Twelve Month Period Ended

(in millions, except %)

September 30, 2016

September 30, 2015

Variance

September 30, 2016

September 30, 2015

Variance

Consumer batteries

$

222.7

$

229.3

$

(6.6

)

(2.9

%)

$

840.7

$

829.5

$

11.2

1.4

%

Small appliances

176.7

197.9

(21.2

)

(10.7

%)

656.0

734.6

(78.6

)

(10.7

%)

Personal care

120.6

125.8

(5.2

)

(4.1

%)

513.6

528.1

(14.5

)

(2.7

%)

Global Batteries & Appliances

520.0

553.0

(33.0

)

(6.0

%)

2,010.3

2,092.2

(81.9

)

(3.9

%)

Hardware & Home Improvement

328.1

331.4

(3.3

)

(1.0

%)

1,241.0

1,205.5

35.5

2.9

%

Global Pet Supplies

206.7

219.3

(12.6

)

(5.7

%)

825.7

758.2

67.5

8.9

%

Home and Garden

94.3

108.3

(14.0

)

(12.9

%)

509.0

474.0

35.0

7.4

%

Global Auto Care

100.7

96.1

4.6

4.8

%

453.7

160.5

293.2

182.7

%

Total

$

1,249.8

$

1,308.1

(58.3

)

(4.5

%)

$

5,039.7

$

4,690.4

349.3

7.4

%

Our press release contains financial information regarding organic net
sales, which we define as net sales excluding the effect of changes in
foreign currency exchange rates and acquisitions. We believe this
non-GAAP measure provides useful information to investors because it
reflects regional and operating segment performance from our activities
without the effect of changes in currency exchange rate and/or
acquisitions. We use organic net sales as one measure to monitor and
evaluate our regional and segment performance. Organic growth is
calculated by comparing organic net sales to reported net sales in the
prior year. The effect of changes in currency exchange rates is
determined by translating the period’s net sales using the currency
exchange rates that were in effect during the prior period. Net sales
are attributed to the geographic regions based on the country of
destination. We exclude net sales from acquired businesses in the
current year for which there are no comparable sales in the prior
period. The following is a reconciliation of reported net sales to
organic net sales for the three and twelve month periods ended September
30, 2016 compared to reported net sales for the three and twelve month
periods ended September 30, 2015, respectively:

September 30, 2016

Net Sales Excluding

Net Sales

Three month period ended

Effect of Changes

Effect of Changes in

Effect of

Organic

September 30,

(in millions, except %)

Net Sales

in Currency

Currency

Acquisitions

Net Sales

2015

Variance

Consumer batteries

$

222.7

$

1.8

$

224.5

$

—

$

224.5

$

229.3

$

(4.8

)

(2.1

%)

Small appliances

176.7

7.9

184.6

—

184.6

197.9

(13.3

)

(6.7

%)

Personal care

120.6

3.0

123.6

—

123.6

125.8

(2.2

)

(1.7

%)

Global Batteries & Appliances

520.0

12.7

532.7

—

532.7

553.0

(20.3

)

(3.7

%)

Hardware & Home Improvement

328.1

1.4

329.5

—

329.5

331.4

(1.9

)

(0.6

%)

Global Pet Supplies

206.7

2.5

209.2

—

209.2

219.3

(10.1

)

(4.6

%)

Home and Garden

94.3

—

94.3

—

94.3

108.3

(14.0

)

(12.9

%)

Global Auto Care

100.7

0.3

101.0

—

101.0

96.1

4.9

5.1

%

Total

$

1,249.8

$

16.9

$

1,266.7

$

—

$

1,266.7

$

1,308.1

(41.4

)

(3.2

%)

September 30, 2016

Net Sales Excluding

Net Sales

Twelve month period ended

Effect of Changes

Effect of Changes in

Effect of

Organic

September 30,

(in millions, except %)

Net Sales

in Currency

Currency

Acquisitions

Net Sales

2015

Variance

Consumer batteries

$

840.7

$

40.0

$

880.7

$

—

$

880.7

$

829.5

$

51.2

6.2

%

Small appliances

656.0

35.1

691.1

—

691.1

734.6

(43.5

)

(5.9

%)

Personal care

513.6

27.4

541.0

—

541.0

528.1

12.9

2.4

%

Global Batteries & Appliances

2,010.3

102.5

2,112.8

—

2,112.8

2,092.2

20.6

1.0

%

Hardware & Home Improvement

1,241.0

14.7

1,255.7

—

1,255.7

1,205.5

50.2

4.2

%

Global Pet Supplies

825.7

8.2

833.9

(74.5

)

759.4

758.2

1.2

0.2

%

Home and Garden

509.0

0.1

509.1

—

509.1

474.0

35.1

7.4

%

Global Auto Care

453.7

0.7

454.4

(277.3

)

177.1

160.5

16.6

10.3

%

Total

$

5,039.7

$

126.2

$

5,165.9

$

(351.8

)

$

4,814.1

$

4,690.4

123.7

2.6

%

SPECTRUM BRANDS HOLDINGS, INC.OTHER SUPPLEMENTAL
INFORMATION

ADJUSTED EBITDA AND ADJUSTED EBITDA MARGIN

Our press release contains financial information regarding Adjusted
EBITDA (Earnings Before Interest, Taxes, Depreciation, Amortization),
which are non-GAAP earnings. Adjusted EBITDA is a metric used by
management and we believe this non-GAAP measure provides useful
information to investors because it reflects ongoing operating
performance and trends of our segments excluding certain non-cash based
expenses and/or non-recurring items during each of the comparable
periods and facilitates comparisons between peer companies since
interest, taxes, depreciation and amortization can differ greatly
between organizations as a result of differing capital structures and
tax strategies. Further, Adjusted EBITDA is a useful measure of a
company’s ability to service debt and is one measure used for
determining the Company’s debt covenant. EBITDA is calculated by
excluding the Company’s income tax expense, interest expense,
depreciation expense and amortization expense (from intangible assets)
from net income. Adjusted EBITDA further excludes: (1) stock based
compensation expense as it is a non-cash based compensation cost; (2)
acquisition and integration costs that consist of transaction costs from
acquisition transactions during the period, or subsequent integration
related project costs directly associated with the acquired business as
previously summarized; (3) restructuring and related costs, which
consist of project costs associated with restructuring initiatives
across the segments as previously summarized; (4) non-cash purchase
accounting inventory adjustments recognized in earnings subsequent to an
acquisition; (5) non-cash asset impairments or write-offs realized; (6)
and other adjustments. During the three and twelve month periods ended
September 30, 2016, other adjustments consisted of costs associated with
the onboarding a key executive and the involuntary transfer of
inventory. During the three and twelve month periods ended September 30,
2015, other adjustments consisted of costs associated with the exiting
of a key executive, coupled with onboarding a key executive. Adjusted
EBITDA Margin is calculated by taking the Adjusted EBITDA margin as a
percentage of Net Sales. The following is a reconciliation of reported
net income to Adjusted EBITDA for the three month periods ended
September, 2016 and 2015, including the calculation of Adjusted EBITDA
Margin for each of the respective periods:

Three month period ended September 30, 2016 (in millions)

Global

Hardware &

Corporate /

Batteries &

Home

Global Pet

Home &

Global Auto

Unallocated

Appliances

Improvement

Supplies

Garden

Care

Items

Consolidated

Net income (loss)

$

61.1

$

57.2

$

24.4

$

15.0

$

24.5

$

(93.1

)

$

89.1

Income tax benefit

—

—

—

—

—

(6.9

)

(6.9

)

Interest expense

—

—

—

—

—

74.2

74.2

Depreciation and amortization

19.2

8.6

10.7

3.9

3.9

—

46.3

EBITDA

80.3

65.8

35.1

18.9

28.4

(25.8

)

202.7

Stock based compensation expense

—

—

—

—

—

16.9

16.9

Acquisition and integration related charges

1.1

1.4

1.5

—

1.3

0.2

5.5

Restructuring and related charges

—

1.9

3.4

—

1.7

—

7.0

Write off from impairment of intangible assets

2.0

—

1.7

1.0

—

—

4.7

Other

—

—

—

—

—

0.1

0.1

Adjusted EBITDA

$

83.4

$

69.1

$

41.7

$

19.9

$

31.4

$

(8.6

)

$

236.9

Net Sales

520.0

328.1

206.7

94.3

100.7

—

1,249.8

Adjusted EBITDA Margin

16.0

%

21.1

%

20.2

%

21.1

%

31.2

%

—

19.0

%

Three month period ended September 30, 2015 (in millions)

Global

Hardware &

Corporate /

Batteries &

Home

Global Pet

Home &

Global Auto

Unallocated

Appliances

Improvement

Supplies

Garden

Care

Items

Consolidated

Net income (loss)

$

52.8

$

50.9

$

24.4

$

19.6

$

6.0

$

(127.1

)

$

26.6

Income tax expense

—

—

—

—

—

39.1

39.1

Interest expense

—

—

—

—

—

65.4

65.4

Depreciation and amortization

18.5

9.6

10.8

3.6

4.7

—

47.2

EBITDA

71.3

60.5

35.2

23.2

10.7

(22.6

)

178.3

Stock based compensation expense

—

—

—

—

—

11.5

11.5

Acquisition and integration related charges

1.1

2.8

5.5

0.9

3.3

0.9

14.5

Restructuring and related charges

2.7

1.9

1.5

0.3

—

—

6.4

Purchase accounting inventory adjustment

—

—

—

—

14.0

—

14.0

Venezuela devaluation

2.5

—

—

—

—

—

2.5

Other

—

—

—

—

—

2.1

2.1

Adjusted EBITDA

$

77.6

$

65.2

$

42.2

$

24.4

$

28.0

$

(8.1

)

$

229.3

Net Sales

553.0

331.4

219.3

108.3

96.1

—

1,308.1

Adjusted EBITDA Margin

14.0

%

19.7

%

19.2

%

22.5

%

29.1

%

—

17.5

%

SPECTRUM BRANDS HOLDINGS, INC.OTHER SUPPLEMENTAL
INFORMATION

ADJUSTED EBITDA AND ADJUSTED EBITDA MARGIN (continued)

The following is a reconciliation of reported net income to Adjusted
EBITDA for the twelve month periods ended September 30, 2016 and 2015,
including the calculation of Adjusted EBITDA Margin for each of the
respective periods:

Twelve months ended September 30, 2016 (in millions)

Global

Hardware &

Corporate /

Batteries &

Home

Global Pet

Home &

Global Auto

Unallocated

Appliances

Improvement

Supplies

Garden

Care

Items

Consolidated

Net income (loss)

$

232.9

$

190.6

$

84.2

$

121.2

$

116.6

$

(387.9

)

$

357.6

Income tax expense

—

—

—

—

—

40.0

40.0

Interest expense

—

—

—

—

—

250.0

250.0

Depreciation and amortization

72.2

35.4

42.7

15.2

17.5

—

183.0

EBITDA

305.1

226.0

126.9

136.4

134.1

(97.9

)

830.6

Stock based compensation expense

—

—

—

—

—

64.4

64.4

Acquisition and integration related charges

2.6

13.3

5.5

0.5

14.0

0.8

36.7

Restructuring and related charges

1.2

2.3

6.0

0.4

5.3

—

15.2

Write off from impairment of intangible assets

2.0

—

1.7

1.0

—

—

4.7

Other

0.5

—

—

—

—

0.7

1.2

Adjusted EBITDA

$

311.4

$

241.6

$

140.1

$

138.3

$

153.4

$

(32.0

)

$

952.8

Net Sales

2,010.3

1,241.0

825.7

509.0

453.7

—

5,039.7

Adjusted EBITDA Margin

15.5

%

19.5

%

17.0

%

27.2

%

33.8

%

—

18.9

%

Twelve months ended September 30, 2015 (in millions)

Global

Hardware &

Corporate /

Batteries &

Home

Global Pet

Home &

Global Auto

Unallocated

Appliances

Improvement

Supplies

Garden

Care

Items

Consolidated

Net income (loss)

$

219.6

$

166.5

$

60.0

$

108.3

$

18.2

$

(423.2

)

$

149.4

Income tax expense

—

—

—

—

—

43.9

43.9

Interest expense

—

—

—

—

—

271.9

271.9

Depreciation and amortization

71.0

39.4

39.7

13.3

6.6

—

170.0

EBITDA

290.6

205.9

99.7

121.6

24.8

(107.4

)

635.2

Stock based compensation expense

—

—

—

—

—

47.6

47.6

Acquisition and integration related charges

4.6

9.1

13.7

2.3

3.8

25.3

58.8

Restructuring and related charges

9.2

9.7

8.9

0.6

—

0.3

28.7

Purchase accounting inventory adjustment

—

0.8

2.2

—

18.7

—

21.7

Venezuela devaluation

2.5

—

—

—

—

—

2.5

Other

—

—

—

—

—

6.1

6.1

Adjusted EBITDA

$

306.9

$

225.5

$

124.5

$

124.5

$

47.3

$

(28.1

)

$

800.6

Net Sales

2,092.2

1,205.5

758.2

474.0

160.5

—

4,690.4

Adjusted EBITDA Margin

14.7

%

18.7

%

16.4

%

26.3

%

29.5

%

—

17.1

%

SPECTRUM BRANDS HOLDINGS, INC.OTHER SUPPLEMENTAL
INFORMATION

ORGANIC ADJUSTED EBITDA

Our press release contains financial information regarding organic
adjusted EBITDA, which we define as adjusted EBITDA excluding the effect
of changes in foreign currency exchange rates and acquisitions. We
believe this non-GAAP measure provides useful information to investors
because it reflects regional and operating segment performance from our
activities without the effect of changes in currency exchange rate
and/or acquisitions. We use organic adjusted EBITDA as one measure to
monitor and evaluate our regional and segment performance. Organic
growth is calculated by comparing organic adjusted EBITDA to adjusted
EBITDA in the prior year. The effect of changes in currency exchange
rates is determined by translating the period’s adjusted EBITDA using
the currency exchange rates that were in effect during the prior period.
We exclude adjusted EBITDA from acquired businesses in the current year
for which there are no comparable metric in the prior period. The
following is a reconciliation of reported adjusted EBITDA (as previously
reconciled to Net Income) to organic adjusted EBITDA for the three and
twelve month periods ended September 30, 2016 compared to the adjusted
EBITDA for the three and twelve month periods ended September 30, 2015,
respectively:

September 30, 2016

Adjusted EBITDA

Excluding Effect

Adjusted EBITDA

Three Month Period Ended

Effect of Changes in

of Changes in

Effect of

Organic

September 30,

(in millions, except %)

Adjusted EBITDA

Currency

Currency

Acquisitions

Adjusted EBITDA

2015

Variance

Global Batteries & Appliances

$

83.4

$

13.3

$

96.7

$

—

$

96.7

$

77.6

$

19.1

24.6%

Hardware & Home Improvement

69.1

0.8

69.9

—

69.9

65.2

4.7

7.2%

Global Pet Supplies

41.7

(0.4)

41.3

—

41.3

42.2

(0.9)

(2.1%)

Home and Garden

19.9

—

19.9

—

19.9

24.4

(4.5)

(18.4%)

Global Auto Care

31.4

0.6

32.0

—

32.0

28.0

4.0

14.3%

Corporate

(8.6)

0.1

(8.5)

—

(8.5)

(8.1)

(0.4)

4.9%

Total

$

236.9

$

14.4

$

251.3

$

—

$

251.3

$

229.3

22.0

9.6%

September 30, 2016

Adjusted EBITDA

Excluding Effect

Adjusted EBITDA

Twelve Month Period Ended

Effect of Changes in

of Changes in

Effect of

Organic

September 30,

(in millions, except %)

Adjusted EBITDA

Currency

Currency

Acquisitions

Adjusted EBITDA

2015

Variance

Global Batteries & Appliances

$

311.4

$

76.5

$

387.9

$

—

$

387.9

$

306.9

$

81.0

26.4%

Hardware & Home Improvement

241.6

2.1

243.7

—

243.7

225.5

18.2

8.1%

Global Pet Supplies

140.1

(0.1)

140.0

(10.8)

129.2

124.5

4.7

3.8%

Home and Garden

138.3

—

138.3

—

138.3

124.5

13.8

11.1%

Global Auto Care

153.4

0.8

154.2

(95.6)

58.6

47.3

11.3

23.9%

Corporate

(32.0)

0.5

(31.5)

—

(31.5)

(28.1)

(3.4)

12.1%

Total

$

952.8

$

79.8

$

1,032.6

$

(106.4)

$

926.2

$

800.6

125.6

15.7%

SPECTRUM BRANDS HOLDINGS, INC.OTHER SUPPLEMENTAL
INFORMATION

FREE CASH FLOW

Our definition of free cash flow, which is a non-GAAP financial measure,
takes into consideration capital investments required to maintain the
operations of our businesses and execute our strategy. We believe free
cash flow provides useful information to investors regarding our ability
to generate cash from business operations that is available for
acquisitions and other investments, service of debt principal, dividends
and share repurchases and meet its working capital requirements. Our
definition of free cash flow may be different from definitions used by
other companies. We also use free cash flow, as defined, as one measure
to monitor and evaluate performance. The following is a reconciliation
of net cash provided from operating activities to the Company’s free
cash flow for the years ended September 30, 2016, 2015 and 2014,
respectively, and the forecasted adjusted free cash flow for the fiscal
year ending September 30, 2017: